Homework Answers
| Profit of Call option buyer is given by following equation: |
| Profit of Call option = Max(ST-X,0) -c |
| where ST is stock price at maturity, X is exercise price and c is premium paid to buy the Call option. |
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ncentive pay Total 3 question (10%). a Draw a profit or loss graph for purchase of...
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract...
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of s30 for which a SS premium is paid a. b. Identify the break-even point, maximum profit, and maximum posses Dr.oec. A. Cirjevskis, professor 09.01.2019
3 question (15%). a Draw a prefit or loss graph for call writer with an exercise...
3 question (15%). a Draw a prefit or loss graph for call writer with an exercise price of sSs for which a S6 premium is paid b. Identlfy break-even point, masxdmum preft, and maximum losses. Dr.oec. A. Čirjevskis, professor 09.01.2019
3 question (10%). a Draw a profit or loss graph for purchase of call contract with...
3 question (10%). a Draw a profit or loss graph for purchase of call contract with an exvercise price of SS,for which a so h Identify break-even point, maximum profit, and maximum losses premium is paid
3 question (15%). a Draw a profit or loss graph for call writer with an exercise...
3 question (15%). a Draw a profit or loss graph for call writer with an exercise price of S55 for which a S6 premium is paid. b. Identify break-even point, maximum profit, and maximum losses.
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract...
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of S30 for which a Ss premium is paid. a. Meuly the Bra.p,
Consider a European call option on €62,500 with an exercise price of $1.50/€. You pay an...
Consider a European call option on €62,500 with an exercise price of $1.50/€. You pay an option premium of $0.10/€ for the call option today. a. If the $-€ spot exchange rate is $1.62/€ on the contract expiration date, would you exercise the call option (buy € at the exercise price at expiration)? What would be the option payoff and profit? b. If the $-€ spot exchange rate is $1.45/€ on the contract expiration date, would you exercise the call...
Need help on Question 9. & 10. Thanks 9) Identify the net profit/loss PER CONTRACT for...
Need help on Question 9. & 10. Thanks
9) Identify the net profit/loss PER CONTRACT for the given option position. Each contract covers 100 shares. Clearly indicate any loss with a negative value. Assume the position is held until expiration. A long SPY 192.50 call (premium $1.36/share). SPY is trading at $197/share at expiration. 10) Identify every breakeven point for the overall option strategy. A ratio call write (stock purchased at $50, 3 short calls with strike = 55 and...
1. Adam buys a put option on British pounds (contract size is £500,000) at a premium...
1. Adam buys a put option on British pounds (contract size is £500,000) at a premium of S0.05/£. The strike price is $1.20/£. (a) Graph the profit/loss on the option contract. (b) What is the break-even price? (a) At what range of spot prices does John make profit? 2. Bank of America buys a call option on euros (contract size is €625,000) at a premium of $0.02 per euro. If the exercise price is $0.98 and the spot price of...
Question 4 (3 marks): Using the information below, calculate the total profit/loss of the CDS contract....
Question 4 (3 marks): Using the information below, calculate the total profit/loss of the CDS contract. Draw a diagram to display the transaction's cash flows. Assume the underlying asset defaults in year 4 and no further payments are made beyond this point. You are long the contract. CDS Contract Total contract value $100,000 Premium 0.65% Frequency Annual Contract length Value of underlying asset Recovery value 5 Years $100,000 7596
For all call and put options, answer questions based on per share price, per share premium,...
For all call and put options, answer questions based on per share price, per share premium, and etc. Please be aware that the first question is asking from the buyer of the call option's point of view and the second question is asking from the seller of the put option's point of view. Answering the questions from the wrong perspective will not be granted most of credits. 2. The market price for Alibaba Group Holding Limited. (Ticker: BABA) was $198.74...
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of s30 for which a SS premium is paid a. b. Identify the break-even point, maximum profit, and maximum posses Dr.oec. A. Cirjevskis, professor 09.01.2019
3 question (15%). a Draw a prefit or loss graph for call writer with an exercise price of sSs for which a S6 premium is paid b. Identlfy break-even point, masxdmum preft, and maximum losses. Dr.oec. A. Čirjevskis, professor 09.01.2019
3 question (10%). a Draw a profit or loss graph for purchase of call contract with an exvercise price of SS,for which a so h Identify break-even point, maximum profit, and maximum losses premium is paid
3 question (15%). a Draw a profit or loss graph for call writer with an exercise price of S55 for which a S6 premium is paid. b. Identify break-even point, maximum profit, and maximum losses.
3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of S30 for which a Ss premium is paid. a. Meuly the Bra.p,
Need help on Question 9. & 10. Thanks
9) Identify the net profit/loss PER CONTRACT for the given option position. Each contract covers 100 shares. Clearly indicate any loss with a negative value. Assume the position is held until expiration. A long SPY 192.50 call (premium $1.36/share). SPY is trading at $197/share at expiration. 10) Identify every breakeven point for the overall option strategy. A ratio call write (stock purchased at $50, 3 short calls with strike = 55 and...
1. Adam buys a put option on British pounds (contract size is £500,000) at a premium of S0.05/£. The strike price is $1.20/£. (a) Graph the profit/loss on the option contract. (b) What is the break-even price? (a) At what range of spot prices does John make profit? 2. Bank of America buys a call option on euros (contract size is €625,000) at a premium of $0.02 per euro. If the exercise price is $0.98 and the spot price of...
Question 4 (3 marks): Using the information below, calculate the total profit/loss of the CDS contract. Draw a diagram to display the transaction's cash flows. Assume the underlying asset defaults in year 4 and no further payments are made beyond this point. You are long the contract. CDS Contract Total contract value $100,000 Premium 0.65% Frequency Annual Contract length Value of underlying asset Recovery value 5 Years $100,000 7596
For all call and put options, answer questions based on per share price, per share premium, and etc. Please be aware that the first question is asking from the buyer of the call option's point of view and the second question is asking from the seller of the put option's point of view. Answering the questions from the wrong perspective will not be granted most of credits. 2. The market price for Alibaba Group Holding Limited. (Ticker: BABA) was $198.74...
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